A leading Islamic scholar in Pakistan had declared cryptocurrency trading “haram” (forbidden) under Islamic law, issuing a religious ruling that could significantly influence public opinion even as the country’s government moves to promote and regulate the digital assets sector.
The fatwa was issued by Mufti Muhammad Taqi Usmani and made public through Darul Uloom Karachi, one of Pakistan’s most respected Sunni Islamic seminaries.
While a fatwa is not legally binding, it carries considerable religious influence among Muslims and often shapes financial and investment decisions. According to the seminary, the ruling has also received the endorsement of several other Islamic scholars.
The religious decree applies broadly to cryptocurrencies, crypto tokens and stablecoins, stating that all such digital assets fall within the same category regardless of the terminology used. As a result, the ruling covers major cryptocurrencies such as Bitcoin and Ethereum, as well as blockchain-based tokens and stablecoins, including USDT (Tether).
Bitcoin declared ‘haram’ under Islamic ruling
At the heart of the fatwa is the argument that cryptocurrencies do not satisfy the Islamic definition of legitimate wealth or property. According to the ruling, these digital assets lack intrinsic value and therefore cannot be considered valid assets for buying and selling under Shariah principles.
The fatwa also raises concerns over the speculative nature of cryptocurrency markets. It argues that trading in digital assets involves excessive uncertainty, known in Islamic jurisprudence as gharar, and resembles gambling, or maysir, due to extreme price volatility and speculative investment practices. Such characteristics, the ruling says, make cryptocurrency transactions religiously impermissible.
Islamic finance is built on principles that prohibit excessive uncertainty, speculative transactions similar to gambling, interest (riba), and investments in assets that lack recognised or intrinsic value.
The ruling concludes that most cryptocurrencies fail to meet these requirements, making their use for trading and investment inconsistent with Islamic financial principles.
Conflicting timeline of fatwa
The fatwa comes at a time when Pakistan is pursuing a very different approach through its economic policy. In recent months, the government has taken steps to encourage the growth of the virtual assets industry by announcing the establishment of the Pakistan Virtual Assets Regulatory Authority, which is expected to license cryptocurrency exchanges and support the integration of blockchain technology into the country’s financial system.
Authorities have also introduced a regulatory framework to establish a licensed cryptocurrency industry.
Although these government initiatives seek to formalise the sector, the religious ruling is expected to play a significant role in shaping how many Muslims in Pakistan view cryptocurrency investment and trading, highlighting the ongoing tension between technological innovation, financial regulation, and religious guidance.
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